Raising the State Pension Age requires careful thought on how people experience retirement, according to a new paper by the International Longevity Centre – UK (ILC-UK): The Future of Retirement

The paper finds that
• The meaning of retirement was originally bound up with the receipt of a pension, but most people do not retire at State Pension Age;
• Good pensions coverage generally increases the likelihood of early retirement, and vice versa. Other things being equal, low-paid/low-skilled workers retire later due to financial compulsion;

• Over the long-term, defined contribution pension schemes are likely to encourage later retirements, in part due to their inherent incentive structure, but also because they tend to be less generous that defined benefit schemes; and
• Many older workers seem to favour a gradual transition from work to retirement. Such arrangements could help people to cope with care responsibilities.

ILC-UK recommends that, if working lives are to be extended, and the government needs to give more attention to:

• Preventative healthcare throughout the life-course;
• Job quality for older workers;
• The potential of ‘gradual retirement’, including encouraging employers to offer downshifting options to staff approaching retirement at all levels;
• Simplifying the pensions system and improving the provision of advice; and
• The support offered to older people with caring responsibilities.